[Federal Register Volume 65, Number 110 (Wednesday, June 7, 2000)]
[Notices]
[Pages 36182-36183]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-14255]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42853; File No. SR-AMEX-00-19]


Self-Regulatory organizations; Notice of Filing of Proposed Rule 
Change by the American Stock Exchange LLC Relating to the Establishment 
of an Interim Seat Allocation Program

May 30, 2000.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on April 14, 2000, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in items I, II, 
and III, below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    Amex is filing with the Commission a proposed rule change to 
establish an Interim Seat Allocation Program that would allow a member 
or member organization designate one or more iterim members. 
Thereafter, the member or member organization would be permitted to 
allocate temporarily its membership, with certain restrictions, to the 
interim member whenever the member or member organization's active 
member or nominee is absent from the trading floor. The text of the 
proposed rule change is available for inspection at the places 
specified in item IV below.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, Amex included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. Amex has prepared summaries, set forth in Sections A, B, 
and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organizations' Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Active Exchange seats are assigned to a person not a firm. 
Consequently, when a person to whom a seat is assigned is absent from 
the trading floor, the seat cannot be used to participate in trading 
activities on the floor. In effect, at any given time, some measurable 
percentage of one of the Exchange's most valuable assets lies dormant 
and unavailable for use. Therefore, the Exchange is proposing an 
Interim Seat Allocation Program which would allow an active member 
(i.e. the person to whom the seat has been assigned and who actively 
participates in securities transactions on the floor of the Exchange) 
temporarily to allocate the membership to an interim member when the 
active member is absent from the trading floor. The active member would 
pay an interim member status annual fee of $1,500 and a flat fee of 
$250 for each allocation. A temporary allocation may be for a minimum 
of one day to a maximum of one year.
    The interim member would have to be approved for membership in 
accordance with the Constitution and Rules of the Exchange. Once 
approved, and upon payment of the flat allocation fee and submission of 
the appropriate from to the Exchange's Membership Services Department, 
an interim member could be allocated the membership held by the active 
member. Contracts made on the trading floor of the Exchange by an 
interim member would be considered contracts made by the active member. 
The active member would also be responsible for all obligations to the 
Exchange and all obligations to other members resulting from Exchange 
transactions or transactions in other securities conducted by the 
interim member. The Exchange would require prior approval of the 
interim members by lessor.
    The owner of the membership, rather than the interim member, would 
be deemed to be the member of the Exchange for purposes of 
participating in any distribution of the assets and funds of the 
Exchange in the event of any voluntary or involuntary final 
liquidation, dissolution, or winding up of the Exchange's affairs. The 
owner of the membership or active member, as the case may be, rather 
than the interim member, would be the Participant in the Exchange's 
Gratuity Fund and entitled to the benefits described in Article IX of 
the Exchange Constitution. In addition, an interim member will not be 
permitted to vote the active member's

[[Page 36183]]

seat or serve on an Exchange committee in the place of the active 
member.\3\
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    \3\ Telephone conversation between Ivonne T. Lugo, Assistant 
General Counsel, Legal and Regulatory Division, Amex, and Michael 
Gaw, Attorney, Division of Market Regulation, Commission, on May 22, 
2000.
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    If an interim member is not allocated the membership held by the 
active member within one year of approval by the Exchange's Membership 
Services Department, the individual's eligibility for interim 
membership would be terminated. To become eligible again for interim 
member status, the individual would have to requalify for membership 
pursuant to Article IV of the Exchange Constitution by repaying all 
fees, passing the test, and updating the application.
    The Exchange believes that a confluence of competitive factors, 
such as the advent of the International Securities Exchange and the 
multiple listing of options, coupled with rising seat prices, make it 
critical for Exchange members to maximize their use of personnel and 
capital resources. This Interim Seat Allocation Program is an effort by 
the Exchange to assist its members in accomplishing that goal.
2. Statutory Basis
    Amex believes that the proposed rule change would be consistent 
with the provisions of section 6(b) of the Act \4\ in general and would 
further the objectives of section 6(b)(5) \5\ in particular, because it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and, in general, to protect investors and the 
public interest; and is not designed to permit unfair discrimination 
between customers, issuers, brokers, and dealers.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received from Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding, or (ii) as to 
which Amex consents, the Commission will:
    (A) by order approve such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549-
0609. Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for inspection and copying in the 
Commission's Public Reference Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
Exchange. All submissions should refer to File No. SR-AMEX-00-19 and 
should be submitted by June 28, 2000.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority. \6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-14255 Filed 6-6-00; 8:45 am]
BILLING CODE 8010-01-M